The Nigerian naira has made notable gains against the US dollar, British pound, and euro in the official foreign exchange market, marking a positive trend that analysts suggest could lead to its best annual performance since 2018. On September 2, 2026, the naira appreciated by N2.74, or 0.21%, closing at N1,326.69 per dollar, compared to N1,329.43 in the previous session.

In addition to its performance against the dollar, the naira gained N9.02 against the pound, settling at N1,791.16 from N1,800.18 the day before. The currency also strengthened against the euro, decreasing by N3.58 to close at N1,538.43.

Analysts from Bloomberg have projected that the naira could finish the year with an 8% gain, potentially strengthening further to N1,290 per dollar by the end of 2026. This would represent an overall appreciation of nearly 12% for the year, a significant recovery for Nigeria's currency.

Several factors are contributing to this positive trend, including increased oil revenues, rising remittance inflows, and heightened interest from foreign investors. These developments have also bolstered Nigeria's external reserves, which have climbed to $53.9 billion, the highest level in 18 years. The Central Bank of Nigeria (CBN) now possesses enhanced capacity to defend the naira and mitigate any economic shocks, particularly with the upcoming election season in view.

The CBN has been implementing reforms aimed at fostering more transparent price discovery and market-driven exchange rates. This policy shift has led to improved liquidity conditions within the foreign exchange market. The trading range for the naira-pound pair has tightened, with the pound fluctuating around the N1,800 mark. Technical analysis indicates support for the naira at N1,780 per pound, with resistance levels identified between N1,880 and N1,900.

Furthermore, a recent Business Expectations Survey conducted by the CBN revealed that Nigerian businesses are optimistic about the naira's performance against the dollar in the coming months. The survey, released on August 7, 2026, indicated that the overall Business Confidence Index (BCI) stood at 5.7 points in July, reflecting a positive sentiment among businesses despite ongoing macroeconomic challenges. Increased demand was cited as a primary factor for this optimism, accounting for 22.3% of the responses.

As the naira continues to strengthen, stakeholders in the Nigerian economy will be closely monitoring these developments, which could have significant implications for trade and investment in the country.